Traditional Forms of Credit in Rural China
The rural financial problems of Republican China are bound up to a considerable extent with the 4000 years or more of history of the Chinese people. To understand and appreciate the evolution of modern rural financial institutions, it is both necessary and interesting to consider historical developments in rural credit or forms of credit that peppered China during the decades and centuries prior to the Republican era. An historical retrospective not only provides some colorful and innovative approaches to providing credit access to farmers but also provides context as to why the innovations in cooperative credit that started to emerge in 1921 China are historically significant. In this chapter we want to step back and explore the institutions and methods by which farmers and emperors established the means to address the liquidity and credit needs of farmers in good times and bad. The ‘institutions’ that evolved include granaries, the Qian Hui (money-loan society, known in modern times as ROSCA, rotating savings and credits association), pawn shops, the Qian Zhuang (money shop) and Piao Hao (old-style native private banks), and private money lenders.